A. Recruiting workers from other sectors
A possible solution to meet skill needs is to recruit workers from other sectors, which have and can provide the skills and knowledge needs of the sector and more specifically the firm. Whether or not this is a desirable option depends, amongst others, on the job function under consideration. For managers of large corporations it is quite usual to bring their general know-how to bear in different sectors. Also for business professionals (e.g. financial analysts, software engineers) sector specificities are of lesser importance. Sector mobility of low skilled workers is much more limited than the mobility of higher educated employees. The lesser the grade of sector specialisation of the occupational profile, the easier employees are able to change between sectors. In other cases recruiting workers from other sectors will need training of sector specific skills. In some cases it will also be possible for highly specialised workers to change sectors.
B. Recruiting workers from other Member States
Recruiting workers from other Member States could be in some cases a possibility to overcome skills problems. However, owing to language, cultural and other problems, including certain entrance barriers left to the Member States, mobility within the European Union is still underdeveloped. Border regions are attracting workers from other countries mainly because of wage advantages and in this way can succeed in solving their skills shortages and gaps. However, regions that face such outward migration (e.g. Poland, East Germany, Parts of Austria, Hungary, Czech Republic, Slovenia, Bulgaria) at the same time face serious problems in meeting their labour market demands. Some have responded by recruiting workers from non-Member States. Even if this might appear a temporary problem, from a longer term perspective, such developments could have serious consequences for the growth of the regional economy – in what might be termed a ‘skills drain’ (cf. ‘brain drain”).
C. Recruiting workers from non-Member States
Recruiting workers from non-Member States is not a zero-sum game for the European economy. Yet this strategic choice is as limited in its overall impact as the strategic choice that proposes to recruit workers from other Member States. On top of this, such recruitment is much more difficult that recruitment from within the EU. In all Member States significant barriers for entering the labour market for workers from outside the EU exist, even for temporary workers. To increase the influx of these workers by, e.g. increasing the immigration quota several political hurdles have to be mastered. Action can be taken here at Member State as well as at EU level, the recent ‘blue card’ proposal and negotiations serving as an example.
D. Recruiting unemployed workers with or without training
Recruiting unemployed workers without training is a strategic option, especially in case of skill shortages if there are not enough skilled workers to meet the employers demand). This option should in these cases be combined with adequate training. Unemployed
workers might have various placement handicaps, especially skills deficits and poor levels of basic qualifications. Low educated groups are still representing the majority of the unemployed labour force, but also highly skilled workers like engineers could be threatened by unemployment.
E. Recruiting young people coming from the education system, with or without re-training
This strategic choice is always a possibility to overcome skill shortages as well as skill gaps. But demographic change should be taken into account too. While in the next few years, until around 2015, there will be a continuous inflow of students entering the labour market, a significant reduction is expected in 2020. In some EU regions there is already a need for young qualified and skilled workers and apprentices. Even where sectors may pay relatively high wages and offer stable carrier prospects, it is not easy to attract enough labour in critical occupational functions. While in the last years labour in business and finance professionals as well as administrative staff and customer services could be attracted the situation in technical occupations (engineers/technicians, construction workers, plant operators) is still critical. Hence, the recruiting of young people can only be successful, if this measure is supported with the other strategic options such as “Improving the image of the sector” and “Stronger cooperation within the industry”. To be more precise, a stronger cooperation between schools, university, training organisations, career managers on the one hand and the industry on the other is needed. The principal aim should be to overcome the mismatch of requirements and wishes of individuals on the one hand and the economy on the other.
F. Training employed workers
In some cases training and re-training could also constitute a strategic choice to meet skill demands. In this case, the employee will be trained for a new working place or task. In general, re-training ends with a formal graduation or certificate. Re-training is an option if the work place or the occupational function is not needed any more. But re-training is only one option. Further education or further training, refresher training and updating courses, or advanced vocational qualification to adapt the workforce to emergent skills needs are also options, which should be taken into account. Re-training or further training of employees can encompass all levels of skills. Training and qualification could be done in-house and on the job as well as by an external education institution. It is more likely that less fundamental variations of up-skilling or re-training will be a strategic choice because re-training has to be regarded as a long term and quite expensive measure compared to the other vocational education forms.
G. Changing the work organisation
Work organisation can be defined in different ways. First, it can be defined as a system of work organisation (e.g. Taylorims, Fordism and Post-Fordism) and second, as a form of division of labour and specialisation. In modern economies productivity is based on the division of labour which by definition implies also a division of skills. There are several instruments of work organisation to react on skill shortages and gaps. Thus, changes in the work organisation can help to overcome skill gaps. In general, work can be reorganised in the following possible ways:
- Group work: A group is a limited number of people who work together over a longer period with a frequent, direct interaction. A group is defined through the
differentiation of roles and joint values. Groups are able to produce better results than single persons due to the combination of different competencies and experiences, the reduction of wrong decisions, stronger work motivation, the direct use of information, new insights and creativity and a better acceptance of decisions, just to mention a few of the many advantages. There are several kinds of group work, like project groups, quality groups and learning circles, as well as committees.
- Job rotation: Within this type of work organisation several people change their work places in a planned alteration. Job rotation enhances the overview of the different production processes, the understanding of different tasks and the feeling for group work. Additionally, monotony and dissatisfaction are reduced.
- Job enlargement: Extension of the scope of work through the combination of several structurally equal or similar tasks. It can produce similar effects as job rotation.
- Job enrichment: Extension of the scope of work through the combination of several structurally different tasks. The scope of decision making and self-control increases, as well as the quality and quantity of work. In general, up skilling of the employee is necessary, but this is also implemented on the job.
Under the influence of new technologies, like information and communication technologies, virtual forms of work organisation, which substitute hierarchies through a horizontal network co-ordination, are also possible. In this sense, mergers and acquisitions as well as project based business colloboration are also available options to change the work organisation. Both measures are strategic possibilities to get access to needed resources or to incorporate new skills. Modern (communication) technology can support the co-ordination and co-operation of labourers working at different places and in combining their respective strengths.
H. Outsourcing and offshoring
In public discussion the terms outsourcing and offshoring are mainly used together, yet it must be emphasised that they describe different technical approaches. While outsourcing means the transfer of management or day-to-day execution of business functions or processes (production, manufacturing, services) to an external service provider, offshoring describes the relocation of business functions or processes from one country to another. Both could be applied as a strategic choice on company level to meet skill needs, by integrating the knowledge, experience and competences of the other firm in the production process.
Outsourcing of personnel as a result of technological change and economic pressure was and still is an ongoing trend. Due to de-regulation and privatisation several tasks and with it skills and competences in the sector were outsourced and in some countries dislocated to other countries to increase labour productivity. Several occupational functions in the production chain have been outsourced nowadays. Skill gaps can be closed by hiring subcontractors with the needed knowledge and competences. If one considers this strategic option to meet skill needs, it has to be taken into account that for subcontracting firms, freelance or contractual workers continuing vocational training often plays a marginal role, because employees are all too often indispensible. One should also bear in mind that freelancers are not available at any time and in unlimited numbers. Outsourcing and offshoring is therefore a limited strategic option to overcome skill gaps. It seems to be more adequate to overcome skill shortages.
I. Changing vocational education
Changing vocational education has a long-term effect. It must be taken into account that changes will have a substantial impact in quality and quantity starting at the earliest within three years time after the changes. The process of changing initial vocational education in content or in structure takes itself several years. The process from defining the needs and problems to the implementation of a new curriculum involves several stakeholders from different expert levels like companies, social partner organisations, training institutes as well as representatives of national and regional education administration. These bargaining processes could take several years and are dependent of the VET-system of the European Member State. Hence, this strategic choice will only be drawn if major structural changes are expected.
Despite these facts, possible changes can be seen in a stronger modularisation of curricula of initial vocational training as well as in building up or strengthening interplant and interregional training infrastructure. The first option could in the long run help to overcome identified skill needs in a sound, flexible and a relatively quick way. The second option is amongst others a possibility to provide the latest high-value equipment for training quickly by sharing resources of several partners.
J. Designing and offering new courses (continuing vocational education and training)
Once it is clear that the current content of vocational training is not up to date and therefore does not address the demands, the development of new courses for continuing vocational education and training could be a strategic option with a short term impact (see also M. Stronger cooperation between stakeholders).
K. Providing information about jobs and (emerging) skills
There is still a lack of transparency concerning current and emerging skill needs and job opportunities in different economic sectors. Information systems on regional, sectoral, national or European level could help to minimise information asymmetries and in that way overcome skill gaps resulting from information deficits. As a consequence, it could prove highly effective in helping students to enter the labour market and find a suitable occupation, just as much as in assisting employees to find new job opportunities based on existing skills or guide them in finding the suitable vocational training course.
Career guidance impacts rather short term. Therefore, it can help to overcome the mismatch between the needs and interest of the individual and those of the prevailing economy. The basic assumption of this strategic choice is that there already exist people who are equipped with the required skills and qualifications, but, due to a lack of information about the labour market possibilities, do not apply for these jobs. Career guidance for students and employees can help to overcome this mismatch. In this respect there can be a clear connection to training. Systems for recognition of prior learning (RPL) can help to determine to what extent people possess necessary competences for a new job. Targeted training can bridge the gap for the failing competences.
L. Improving the image of the sector
Improving the image of the sector could be an easy and suitable measure especially to overcome skill and labour market shortages and attract new employees. Several instruments could be implemented by sector organisations in co-operation with different
non sector actors like schools, career management organisations, training organisation, public employment services, and public administration. Instruments could be company visits for pupils, offering internships for pupils and enhanced public relation. Especially in sectors where framework conditions and occupational functions changed fundamentally, due to technological or organisational restructuring or low wage levels, this offers a possibility to overcome stereotypes as much as old fashioned views and to attract more labour. Moreover, this measure does not only provide a chance to overcome stereotypes in relation to the sector but also to some occupational functions. The effect of this strategic option is long-term. In consideration of the apprenticeship system, which can take up five to seven years (if the specialisation of high qualified jobs in the sector is taken into account) until the volume effect is reached, one must arrive at the conclusion that in some occupational functions it has to be initiated right now.
M. Stronger cooperation with the industry
A stronger co-operation between industry and training institutes on a regular basis is one possibility to meet the skill needs in the sector. In some sectors and countries training of employees does not seem to be in line with the industry’s emerging needs. New training and teaching solutions are to be developed between the industry, sector representatives, education institutions and research centres, public bodies, etc. Information exchange and a stable cooperation between the relevant stakeholders could improve the matching of training needs and demands. In the long run it will enhance the efficiency of training output, strengthen the quality of training and maximize the individual potential. To build up this kind of cooperation takes time, but in the long run it might well be capable to provide accurate solutions for problems. Networks and partnerships between these stakeholders to forecast skill needs in the sectors also present a long term measure. They could help to define emergent skill needs. While knowledge about the development of skill supply is quite high, the knowledge about the development of skill demand in different sectors is still improvable. These kinds of networks can cooperatively detect the need for action and contribute to the development of recommendation of actions.
Glossary
Apprenticeship. Systematic, long-term training alternating periods at the workplace and in an educational institution or training centre. The apprentice is contractually linked to the employer and receives remuneration (wage or allowance). The employer assumes responsibility for providing the trainee with training leading to a specific occupation. (Cedefop, 2004)
Competence. Competence refers to the proven ability to use knowledge, skills and personal, social and/ or methodological abilities, in work or study situations and in professional and personal development. In the context of the European Qualifications Framework, competence is described in terms of responsibility and autonomy;
Compulsory education. The minimal legal standards and duration of obligatory schooling. (ILO, 1998)
Concentration index. The concentration index assesses the relative contribution of a specific sector to the national economy compared to a greater entity, such as the EU, thereby correcting for the size of the country. In more general terms, the concentration index is a measure of comparative advantage, with changes over time revealing changes in the production structure of a country. An increase of the concentration index for a sector signifies relatively fast growth of that particular sector in the country concerned compared to the same sector in the EU. How does the concentration index work in practice? A few (hypothetical) examples: if sector x represents a 5% share of the German economy and a 5% share of the EU economy, the concentration index of sector x equals a 100. If sector x represents 5% of the German economy, but 10% of the EU economy, the concentration index of sector x is 50. If the same sector x represents 10% of the German economy and 5% of the EU economy, the concentration index of sector x is 200.
The concentration index concept can be applied using different indicators (variables). In our study we measure the concentration index using employment, value added and trade, in order to make a distinction between the relative performance of countries EU-wide. We distinguish between four country groupings, each signifying a different sector performance over time. If a sector in a country has a strong position (hence showing a concentration index higher than 100) and has experienced a clear index growth over the last years, the sector is defined as winning in that country. If the sector has a strong position, but experienced a decline of the concentration index, we say the sector is losing momentum. If the sector has a weak position, but gained in the past, we say that the sector in that country is upcoming. If the sector has a weak position and experienced a decline of the index, we say that the sector is retreating.
Employability. The degree of adaptability an individual demonstrates in finding and keeping a job, and updating occupational competences. (Cedefop, 2000)
European Credit system for Vocational Education and Training (ECVET). A device in which qualifications are expressed in units of learning outcomes to which credit points are attached, and which is combined with a procedure for validating learning outcomes. The aim of this system is to promote:
• accumulation, transfer and validation and recognition of learning outcomes (either formal, non-formal or informal) acquired in different countries;
• implementation of lifelong learning; • transparency of qualifications;